What happens if you default on a federal student loan?
Falling behind on student loans is pretty common, and it doesn't happen overnight.
Key takeaways
- Most federal student loans go into default after 270 days of missed payments.
- Default can mean garnishment of up to 15% of your pay and the loss of your tax refund, without a court order.
- In January 2026, the government paused wage garnishment and tax refund seizures for defaulted loans. As of fall 2026, it hadn't said when they'll restart.
- You can still get out of default, and the sooner you act, the more options you keep.
About 9 million federal borrowers were in default as of early 2026. If you're one of them, or getting close, you're far from alone. Here's how the process works.
The timeline
Day 1: The day after a missed payment, your loan is delinquent. Your servicer will send reminders and may charge a late fee.
Day 90: Your servicer reports the late payment to the three major credit bureaus. Your credit score can drop sharply.
Day 270: Your loan is in default. It moves from your servicer to the Department of Education's Default Resolution Group.
After default: Collection efforts can start. You should get a written notice before any wages or tax refunds are taken.
What does going into default mean?
Once you're in default, several things change at once.
The full balance is due, and the government can demand the entire amount right away, not just your missed payments.
You lose your options. You can't choose a repayment plan, get deferment or forbearance, or get new federal student aid until you're out of default.
Your credit takes a hit. The default is reported to the credit bureaus and can stay on your report for years, making almost all aspects of life harder.
Collection costs are added. Fees for collecting the debt can be added to what you owe.
How the government can collect
Federal student loans are different from most debts because the government doesn't need to sue you to collect.
Wage garnishment: Your employer can be ordered to send up to 15% of your disposable pay directly to the government. You'll get a notice at least 30 days beforehand and the right to request a hearing.
Treasury offset: Your federal tax refund can be taken and applied to your loan. Some other federal payments, including part of Social Security benefits, can be reduced, too.
Lawsuits: These are rare for federal loans, but they're allowed. Federal student loans have no statute of limitations, so the debt doesn't expire.
Where collections stand now
The Department of Education paused wage garnishment and tax refund seizures for defaulted borrowers at the beginning of 2026. As of fall, no restart date had been announced. The government also agreed to eventually shift collections on defaulted loans to the U.S. Treasury, but no start date has been set.
This isn't forgiveness. Your debt is still there, and it's accruing interest. Use this time to get out of default.
What about private loans?
Private loans follow different rules. Many go into default after about 120 days of missed payments, but a private lender can't garnish your wages or take your tax refund on its own. It has to sue you and win a court judgment first. If you have a cosigner, the lender can go after them, too.
If you're behind but not in default yet
You still have all your options. Call your servicer and ask about switching to an income-driven plan, which can knock your payment as low as $10 a month. You can also ask about deferment or forbearance. If your servicer asks for paperwork, send it before the deadline.
What this is
Why it matters
What it means for you
What to do next
Sources
Related FAQs
Common questions about this topic, answered simply.
Can bankruptcy get rid of my student loans?
Sometimes, but it's hard. You have to prove repaying would cause "undue hardship." A bankruptcy lawyer or legal aid office can tell you if it's worth trying.
Will I lose my Social Security?
Not all of it. The law protects a portion of your monthly benefit, and only part of the rest can be taken.
Does default ever go away by itself?
No, federal loans don't expire. You have to resolve the default.
What is APR?
APR is the yearly cost of borrowing, shown as a percentage.
Keep reading
How to get out of student loan default: rehabilitation vs. consolidation
Default doesn’t have to be a dead end. There are two ways to get federal student loans back in good standing, and both can work on a tight budget.
Read Borrowing and loansStudent loan forgiveness programs that still exist
Student loan forgiveness isn’t over, but it has evolved considerably. Several federal programs still cancel some or all of what borrowers owe, but most have strict rules when it comes to eligibility.
Read Borrowing and loansDeferment vs. forbearance: how to pause student loan payments without making it worse
Dealing with income trouble? Pausing your student loan payments could be the solution.
Read Borrowing and loansLife after SAVE: How to choose a repayment plan under the new rules
The SAVE plan is gone, and federal student loan repayment is different from what it was a year ago.
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